Finland’s bioeconomy operating environment continues to develop in a positive direction with the Finnish government proposing legislation to ban coal-fired power and heat generation by 1 May 2029. A new bill submitted to parliament in October 2018 also puts forward measures to promote the use of transport biofuels and biofuel oil for heating and machinery. The proposals are part of Finland’s National Energy and Climate Strategy to 2030 which aims to phase out the use of fossil fuels in energy generation, move towards an emission-free energy system, and decrease the use of imported oil.

The government proposes to gradually increase the obligation to distribute transport biofuels, starting from 18% in 2021 and reaching 30% by 2029. Similarly, the obligation to distribute advanced biofuels would be tightened from 2021 onwards, reaching 10 percentage points by 2030. Distributors of light fuel oil would be assigned a new obligation to replace some of the light fuel oil used in heating, machinery and stationary engines with biofuel oil as of 2021. This obligation would be increased gradually from 3% in 2021 to 10% in 2028.

According to the government, the proposed distribution obligations could reduce emissions by 50% by 2030 when combined with other targets in the National Energy and Climate Strategy, such as 250,000 electric cars, 50,000 gas cars and better energy efficiency.

“This proposed legislation will clarify the market situation concerning transport biofuels for the period 2020–2030 and therefore strengthens the prerequisites for the implementation of many pending biofuel projects. The coherent policy and progress towards the target of renewable energy accounting for 50% of end consumption by 2030 is set to continue,” says Jari Tielinen, Senior Advisor, Invest in Finland.

IEA report highlights biofuel challenges and opportunities

According to an in-depth country review published by International Energy Authority (IEA) in September 2018, Finland had the second-highest share of biofuels among its member countries. The report commends Finland’s “strong climate policies and ambitious 2030 targets for halving oil demand and phasing out coal use, among others,” while reminding of the need to focus on cost-effective and sustainable measures to achieve this goal.

The report highlights the by-products and residues from Finland’s strong forest industry as a key resource “used as fuels in power and heat generation or processed to second-generation biofuels, notably biodiesel where Finland’s industry is leading globally”. IEA encourages Finland to pursue technology development for biofuel use in aviation, maritime, and heavy-duty road transport. Prioritising biofuels for long-distance modes can be a growth opportunity for the industry, according to the report.

“Finland’s government and industry also boost research and development (R&D) efforts to develop and demonstrate a range of new biofuels technologies, including lignocellulosic feedstocks, hydrotreated vegetal oil (HVO), co-processing of biofeedstocks in existing oil refineries, biomass-to-liquids (BTL) plants using gasification and Fischer-Tropsch (FT) process, and bioethanol from wood and straw,” states the report.

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